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Man accused of selling unregistered securities will have charges dismissed

May 17, 2017

An Indiana trial court must dismiss charges brought against a man accused of selling unregistered securities in 2007 after the Indiana Court of Appeals found the statute of limitations had expired before he was charged.

The judges held the man did not make any positive acts to conceal his offenses, so the five-year statute of limitations to bring charges against him began running in 2007.

In Peter T. Dvorak v. State of Indiana, 53A01-1604-CR-923, Peter Dvorak was accused of knowingly offering or selling an unregistered, non-exempt promissory note and agreement to lend and borrow money to Todd Wahl in 2007. Further, Dvorak, who was also not registered to sell the note and agreement, was accused of concealing his actions from Wahl by structuring the note and agreement to not mature until July 2010, making Wahl unaware of the fact that his investment was not valid until then.

Wahl filed a complaint with the Indiana Secretary of State, Securities Division in September 2011, and Dvorak was formally charged with Class C felony offer or sale of an unregistered security and Class C felony acting as an unregistered agent in June 2015. Dvorak moved to dismiss, arguing the charges against him were barred by the five-year statute of limitations, which he said began running when the offenses occurred in 2007.

The Monroe Circuit Court denied the motion to dismiss, finding “the statute of limitations was tolled because Defendant’s structuring of the security was a positive act by the defendant that was calculated to conceal the fact that a crime had been committed.” The court certified the order for interlocutory appeal in which Dvorak challenged the denial of his motion to dismiss.

In a unanimous Wednesday opinion, the Indiana Court of Appeals reversed the denial of Dvorak’s motion, with Judge Michael Barnes writing for the panel that Indiana Code 35-41-4-2(h)(2) holds the statute of limitations does not begin to run during any time in which “…the accused person conceals evidence of the offense, and evidence sufficient to charge the person with that offense is unknown to the prosecuting authority and could not have been discovered by that authority by exercise of due diligence.”

In this case, Barnes wrote Dvorak “did not engage in any positive act calculated to conceal the fact that he was not registered and the security was not registered with the Secretary of State.” Such a “positive act” is required under the precedent of State v. Chrzan,693 N.E.2d 566 (Ind. Ct. App. 1998).

The denial of Dvorak’s motion to dismiss was reversed and the case was remanded.
 

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